How to Manage Your Business in a Recession: "#1 Reset Priorities to Face the New Reality"

The January 19, 2009 print edition of Fortune magazine features an article entitled How to Manage Your Business in a Recession, authored by Geoff Colvin (pp.66-71). Inside, Geoff lays out 10 ways to weather the current economic storm. He starts:

“Exciting as it is to be living through historic economic drama, you can’t just stand by and watch. You have to act–yet you have no script. So much of today’s turmoil is unprecedented that we can’t find much guidance by looking to the past. For managers across the global economy, as well as for Team Obama on its way to Washington, today’s great question is, What do we do now?”

Let’s take Geoff’s 10 principles, and analyze the implications for your collaboration strategy (see the links to all 10 principles). We’ll start with #1.

1. Reset priorities to face the new reality
When the rules of the game change, you have to play the new game. Geoff quotes John Mackey, CEO of Whole Foods Market, who says that the new mindset requires more frugality, greater attention to every expense, and greater attention to capital investment, because growth isn’t going to hide it.

Here are key actions to take with respect to your collaboration strategy.

Expense Management for Meetings
Examine travel patterns for inhouse meetings, and estimate the time and cost involved for the next 6-12 months. Can you put in place new ways of “meeting” … new ways of getting to coordinated action without putting people on planes? For larger firms with clear travel patterns between major offices, perhaps a couple of telepresence suites make a lot of financial sense. Remember, it’s the cost of telepresence in comparison to the alternative that signals whether it’s a prudent financial investment, not the out-of-pocket cost per se. For smaller firms, the TANDBERG line of personal video conferencing equipment could be the way to go ($6-$9K each), or even an Apple iMac 20″ ($2k each) for video conferencing between two or more people. There’s another upside to having remote meeting capabalities too — the possibility of meeting more frequently … say every day for 10 minutes. That always does wonders for keeping people focused on the important priorities, and keeping everyone marching to the same tune. So yes, there’s a cost optimization benefit in recession times to having such equipment available and well embedded as part of employee repetoire, but there are ongoing strategic benefits that play out beyond recession times too.

Make sure you see my flowchart about making decisions on face-to-face travel, which was part of a serendipitious collaborative effort with Jessica Lipnack (Boston) and Oscar Berg (Sweden).

Meetings that are more about co-creation of content than discussion and decision making can be supported through online meeting tools like Citrix GoToMeeting, LotusLive Meetings, Microsoft Office Live Meeting, and many more (my personal favorite is Citrix GoToMeeting — it just always works!). Co-writing of documents, looking over an upcoming presentation, brainstorming about market opportunities, and more … all can be supported just as well through online meeting tools, for about $40 per month.

Coming back to the video meetings one, Skype, SightSpeed and other providers offer no-cost or low-cost video tools. If the quality of these is sufficient for your requirements, have at it.

Of course, you can take all of this the other way too. One of the counter-intuitive strategies to embrace in a recession is to do things differently from every other firm. If they are hankering down to weather the storm, step up your efforts to win customers. Go against the flow of retreating to your office and meeting virtually — get on that plane and head down to the customer’s office and meet in person. Build engagement and connection, and win the deal by showing up. I always loved the audacity of Tom Peters suggestion in “The Pursuit of Wow” — travel 3,000 km for the 5 minute meeting.

Expand Your Supply Chain to Optimize Expenditure
You make widgets, and you are pretty good at making widgets. Your customers love your widgets, and you are a preferred supplier to many of the top names in the field. But you face new cost pressures, just as your customers do. It’s time to re-examine the componentry that makes up your widgets, and make some decisions about whether there are other parts in the widget that can be manufactured by others. Share the love — and the risk — and stretch your research and development budget — by partnering with other firms for widget components. Don’t try and do it all.

The opposite advice works too. If some of your supply chain partners are facing significant business challenges (and considering shutting up shop), perhaps it’s time to consolidate your supply chain and bring new capabilities inhouse through an acqusition. This would reduce your exposure to supply chain disruption in the future, although you’ll need the cash or stock currency to make it work in the short term.

It’s highly contextual, so examine the possibilities from both ends of the spectrum.

Get Out of Managing Projects in Email
With the volatility in the market, great employees can be head-hunted out of your firm by others, and you equally have the option of optimizing your employee ranks through layoffs and new hirings. If you are running projects in email, what’s going on is locked up in individual email inboxes. That makes it so much more difficult to induct new people into projects as they join your firm, or to pick up projects that exiting people drop on the way out.

You need … a collaboration tool that supports team projects, with all project artifacts in one place (documents, timeline, team profiles, tasks, calendar meetings and events, etc.), and the ability to add new people and remove departing people easily and quickly. There are a plethora of options … inhouse variants (Lotus Notes, Lotus Quickr, Microsoft SharePoint, Jive Clearspace, etc.) and hosted variants (Central Desktop, 37signals, Huddle.net, etc.). If you aren’t already, shifting the doing of projects to project collaboration tools such as these should be a top priority. You will face costs in getting these tools deployed at a technical level, as well as costs in training your people how to use the tools and make the best use of them.

Recruitment and Retention
Watch your recruitment and retention strategies carefully. You know how much it costs to hire a good person to your firm … and if you lose them to a competitor, you’ll have to replace them. Collaboration tools that help people express their opinion (blogs and discussions), have a voice (blogs), work effectivey with others (project spaces, wikis), know what’s going on (CEO’s blog, enterprise wiki) … tools like these can make stressed out employees want to stay by providing an oasis of sanity in a wilderness of mirages. By giving employees a way to have their say, to engage with others, to provide and receive support from colleagues inside the organization … enables you to build goodwill and engagement that keeps great people inside and attracts outside people who wish to flee their current toxic firm.

What Else?
What strategies of success are you embracing as the economic indicators spread fear and alarm?

2 thoughts on “How to Manage Your Business in a Recession: "#1 Reset Priorities to Face the New Reality"

  1. Wow, valuable comments under Get Out of Managing Projects in Email. That’s something most people don’t think about enough. Email is so useful, but it has definite limitations. Wikis can benefit a company tremendously in capturing competitive information, ideas and employees’ knowledge. There are many other benefits to using a wiki during a recession. Aberdeen recently did a webinar about it. You can access it at http://www.etouch.net.

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